Money hide-and-seek puts cheaters in the line of fire

MONEY comes in various forms. There are dollars, euros and yen, reals, roubles, rupees and renminbi, fiat currencies, gold and bitcoins.

But recent developments in the New York financial world serve as a reminder that for a certain class of men — married ones who misbehave — there are really only two kinds of money. There is money their wives know about, and money of which their wives know nothing at all.

The first category — conventional matrimonial money, or what divorce lawyers call “community property” — has its uses. It can be employed to buy homes and cars, cover college costs and country club fees, and endow hospital facilities, concert halls and food banks for the poor.

But it is entirely inappropriate tender for what could be called transactions of transgression.

Married men who want to fool around seriously — to support a mistress, say — need to find funds that exist outside the purview of their significant others, or run the risk of hearing from their attorneys. (I would have mentioned married women in this context if I knew of any living this way, but I do not.)

The unfortunate result is that cheating can beget more cheating.

Several big business scandals of recent years in the US have involved executives skirting the rules at their own companies so they could secure the sort of special-purpose financing that a wealthy married man needs to pursue other women in peace.

This state of affairs in corporate US came into focus again late last week when a New York investment banker named Frank Perkins Hixon was arrested by federal agents on insider trading charges. Hixon, a veteran of Credit Suisse and Lazard, had worked most recently at Evercore Partners, which has said it fired him “for cause” in January.

The government’s allegations portray Hixon — a 56-year-old banker widely known as “Perk” — as a classic case of a married man who needed money that his wife would not know about. The US Securities and Exchange Commission says he fathered a daughter, now five years old, during the course of a yearslong relationship with a woman about 20 years his junior. Her name is Destiny Wind Robinson.

To pay for Destiny’s child, as it were, the government alleges that Hixon trafficked in sensitive corporate secrets — a store of value well suited for a player looking to pay off personal obligations without leaving a paper trail. Relying on material, non-public information that he obtained as a senior Evercore adviser on mining and metals deals, Hixon engineered stock trades in his former lover’s brokerage account that yielded almost $900 000 (about R9.6-million) in profits, according to the SEC.

As is the case with so many strategies on Wall Street, the one allegedly used by Hixon was not particularly new. Spicing up an extramarital relationship with easily monetised stock tips is an enduring trick of the trade. James McDermott, the mar- ried CEO of an investment bank called Keefe, Bruyette & Woods, cooled his heels in prison for a few months after doling out inside information that federal prosecutors said was worth at least $88 135. It was for his much younger girlfriend, Kathryn Gannon, who was known as Marilyn Star when she was strutting her stuff in strip clubs and pornographic films such as Marilyn Whips Wallstreet .

Another wife-resistant tactic used by business leaders in their pursuit of female companionship involves finding ways to get other people to finance their social life. A few years ago, for example, Brian Dunn resigned as CEO of Best Buy after the retailer found that he had made mistakes in judgment that included asking a company vendor to supply a concert ticket in Las Vegas to a female underling with whom Dunn had formed “an extremely close personal relationship”.

Scarcely two years before, Mark Hurd was ousted as CEO of HewlettPackard after the computer company accused him of fudging expense claims to disguise the nature of his relationship with a contractor called Jodie Fisher, a former actress whose body of work included erotic films such as Intimate Obsession.

Taken together, it makes one realise how stressful infidelity must be for married men with so much to lose in divorce settlements. Even when these guys are supposed to be having fun, they are turning the numbers over in their heads and making sure every trade works to their advantage. — © The Financial Times, London